Feds get tough on contractors

New laws give federal coverage to contractor arrangements. Any arrangements decreed a sham could be costly for SMEs. By PETER VITALE of VECCI

WorkChoices grabbed the spotlight before Christmas, but equally important changes to the law covering independent contractors went through the Parliament at the same time.

The principal effects of the changes under the Independent Contractors Act (ICA), and complementary amendments to the Workplace Relations Act (WRA) are:

• State laws that deem certain contractors to be employees, effectively bringing them under award safety net coverage, are overridden.
• Employers who enter “sham” independent contractor arrangements are penalised.
• There is a new right for contractors to have “unfair” contracts reviewed by the courts.